A little less than two years ago, Leonard Tannenbaum was preparing to join rare company on Wall Street. His business development company (BDC), Fifth Street Finance, was riding high and the planned October 2014 public offering of his BDC investment firm, Fifth Street Asset Management, was poised to vault him to billionaire status.

During the heady days of the aughts credit boom, Tannenbaum carved out a niche in the business of lending to small businesses and middle-market private equity buyouts. As markets cratered in 2008, Tannenbaum, virtually unknown on Wall Street a decade earlier, was on the rise. He listed his lending vehicle on public stock markets in 2008 and counted poker buddy David Einhorn, of Greenlight Capital, as his largest investor. Fifth Street Finance (FSC), was one of the fastest growing BDCs during the recovery, growing assets five-fold, and Tannenbaum expected the asset manager IPO would be another home run.

But that was the top.

The IPO flopped, Tannenbaum's BDC empire began to show worrying cracks, and within a year he was facing a litany of shareholder lawsuits, frustrated analysts, and a challenge from two activist investors. In February, FORBES published an investigation into Tannenbaum's problems titled, Fooling The Right People Some Of The Time. The piece detailed how shareholders accused Tannenbaum of mismanaging its two publicly traded BDCs - Fifth Street Finance and Fifth Street Floating Rate - to prop up the valuation of his asset manager during the late 2014 IPO process.

Billionaire connections and yield-greedy investors almost propelled financier Leonard Tannenbaum into the three-comma club. Now he's mired in lawsuits.

The complaints seemed to have merit. Once FSAM hit public markets, Tannenbaum's BDCs both slashed their dividends and began to show a rise in non-performing loans. Worse yet, Fifth Street Asset Management was forced to disclose that it incorrectly charged fees to its BDCs due to accounting errors. Now as Tannenbaum tries to put his shareholder problem behind him, it seems the Securities and Exchange Commission has taken notice.

On Thursday, in a SEC filing, Fifth Street disclosed that it plans to settle multiple shareholder lawsuits for a collective tens of millions of dollars (paid for mostly by the firm's insurance coverage). But in the filing, Fifth Street also states that in March, the Division of Enforcement of the Securities and Exchange Commission subpoenaed the firm and asked for the preservation of documents related to the issues raised in securities class actions claims and during an ordinary SEC examination that began in October 2015.

The March subpoenas, Fifth Street's filing states, focus on the valuation of FSC’s portfolio companies and investments, expenses allocated or charged to FSC and FSFR, a Tannenbaum-controlled entities' trading in the securities of other publicly traded business development companies, and statements to investors about the fair value of FSC’s portfolio companies or investments and expenses charged to FSC and FSFR.

Subpoenas also address "statements and/or potential omissions in the entities’ SEC filings, (vii) the entities’ books, records, and accounts and whether they fairly and accurately reflected the entities’ transactions and dispositions of assets, and (viii) several other issues relating to corporate books and records," Fifth Street's SEC filing states.

"The subpoenaed Fifth Street entities are cooperating with the Division of Enforcement investigation, have produced requested documents, and have been communicating with Division of Enforcement personnel," Fifth Street states. (A spokesperson for Fifth Street didn't immediately respond to an email seeking comment)

In terms of shareholder suits, it seems Fifth Street is ready to fork out significant money, in addition to making large concessions to investors, to resolve its past problems.

Tannenbaum's biggest BDC, FSC, will pay $14,050,000 to a settlement class consisting of investors who purchased FSC common stock from July 7, 2014 through February 6, 2015. FSAM will settle class action claims with a $9,250,000 cash payment to investors who bought into the asset manager's 2014 initial public offering.

The FSC settlement further stipulates a $1 million quarterly fee waiver for ten quarters beginning in 2018 and maintenance of previously announced management fee cuts for at least four years. It also calls for new governance on FSC equity ownership by its Board members, disclosure of executive compensation, director independence, valuation policies and processes, creation of a Board-level Credit Risk and Conflicts Committee, and increased consultation with outside advisers and independent third parties. Finally, FSC will cover plaintiffs requests for the payment of their $5.1 million in attorneys fees and expenses.

Previously, FSC settled with activist shareholder RiverNorth in a deal analysts dubbed as greenmail, removing the risk Tannenbaum's cash cow asset manager FSAM would be removed as investment advisor. FSFR also narrowly won a separate activist shareholder challenge after a flurry of insider buying and the greenmail settlement with RiverNorth tilted a shareholder vote in its favor.

Whether Thursday's proposed settlement is the beginning of a kinder, fairer and more shareholder-oriented Fifth Street, or whether the SEC's subpoena will dredge up new headaches for Tannenbaum is to be seen.